Introduction

In a significant judgment concerning real estate transactions in the Emirate of Abu Dhabi, the Abu Dhabi Court of Cassation issued its decision on 6 May 2026 in Civil Cassation Case No. 72 of 2026 and Civil Cassation Case No. 74 of 2026, addressing the enforceability of unregistered property sale agreements, the legal consequences of violating mandatory real estate registration procedures, claims relating to restitution and unjust enrichment, and the jurisdictional scope of Abu Dhabi courts in disputes involving estate proceedings pending before other judicial committees.

The judgment is particularly important because it reaffirmed the mandatory nature of Abu Dhabi real estate registration procedures and clarified that courts cannot validate property transfers that were not executed before the competent municipal authority, even where substantial consideration has been paid and possession has been delivered.

Background of the Dispute

The dispute arose from a property sale agreement dated 22 March 2020 concerning a residential land plot located in Abu Dhabi with an area of approximately 39,863.71 square feet. The claimant alleged that the second defendant, acting pursuant to a notarized power of attorney issued by the deceased owner, sold the property to him for AED 7,000,000.

The claimant asserted that he:

Paid the purchase price in full;
Took possession of the property;
Undertook substantial construction, finishing, and improvement works exceeding several million dirhams;
Requested transfer of ownership from the heirs of the deceased owner, who subsequently refused to complete the transfer process.

Accordingly, the claimant initiated Abu Dhabi Civil Case No. 259 of 2025 seeking:

A judgment confirming the validity and enforceability of the sale agreement;
Transfer of ownership of the property into his name;
Exclusion of the property from the assets forming part of the deceased’s estate.

Alternatively, the claimant sought:

Refund of the AED 7,000,000 purchase price;
Compensation of AED 5,000,000 representing construction and improvement costs;
Additional compensation of AED 5,000,000 for material and moral damages.

The heirs, in turn, filed a counterclaim seeking compensation for the claimant’s alleged use and occupation of the property during the relevant period together with legal interest.

First Instance and Appeal Proceedings

The Court of First Instance ruled in favor of the claimant and ordered validation and enforcement of the sale agreement while dismissing the heirs’ counterclaim for lack of sufficient connection to the principal dispute.

The heirs subsequently appealed the judgment before the Abu Dhabi Court of Appeal under Appeal No. 414 of 2025.

On 26 February 2026, the Court of Appeal partially overturned the First Instance judgment and ruled:

To reject the claim seeking validation and enforcement of the sale agreement;
To return the matter to the Court of First Instance for determination of the claimant’s alternative claims concerning restitution and compensation;
To remit the counterclaim for consideration on the merits.

Both parties thereafter filed separate cassation appeals before the Abu Dhabi Court of Cassation.

Legal Issues Before the Court of Cassation

The Court of Cassation considered several important legal questions, including:

Whether an unregistered real estate sale agreement may be judicially enforced;
Whether the claimant could rely upon the sale agreement despite failure to register the transaction before the competent municipal authority;
Whether the power of attorney authorized execution of the sale;
Whether Abu Dhabi courts possessed jurisdiction despite estate proceedings pending before a judicial committee established in Sharjah;
Whether restitutionary claims arising from a void property transaction remained legally maintainable.

The Court’s Position on Unregistered Real Estate Transactions

One of the most significant aspects of the judgment concerned the Court’s interpretation of the Supreme Ruler’s Directive dated 5 May 2010 governing real estate transactions in Abu Dhabi.

The Court reaffirmed that although real estate sale contracts are generally consensual contracts under UAE law, the Abu Dhabi regulatory framework imposes a mandatory special condition requiring that any transfer of ownership or real property rights must be conducted before the competent municipal real estate registration authority.

The Court expressly held that:

Courts may not recognize or enforce property sale contracts that were not properly registered;
Any agreement involving transfer of real estate ownership executed outside the approved registration mechanism is legally ineffective before the courts;
A claim for “validation and enforcement” of such contract must therefore be rejected.

The Court emphasized that the special regulatory framework introduced by the Abu Dhabi Ruler’s Directive overrides the general consensual principles ordinarily applicable to contracts under the Civil Transactions Law.

Accordingly, the Court confirmed the Court of Appeal’s decision refusing to validate the property sale agreement executed on 22 March 2020 because the transaction had not been completed before the competent municipal authority.

Restitution and Unjust Enrichment Despite Invalidity of the Sale

Although the Court confirmed that the sale agreement itself was legally unenforceable, it nevertheless clarified an extremely important principle concerning restitutionary relief.

The Court held that invalidity of the sale contract does not prevent restoration of the parties to their pre-contractual positions where one party has suffered impoverishment and the other has received unjust enrichment.

The Court specifically recognized that:

Payment of the purchase price;
Construction expenditures;
Improvement costs incurred by the purchaser;

may constitute independent sources of obligations based upon unjust enrichment and restoration principles, even where the underlying sale contract is void.

For that reason, the Court approved the Court of Appeal’s decision remitting the claimant’s alternative claims to the Court of First Instance for substantive examination.

This aspect of the judgment is particularly significant because it preserves equitable remedies for purchasers who acted in good faith despite procedural invalidity of the transaction.

Jurisdictional Issues and Estate Proceedings

The heirs further argued that Abu Dhabi courts lacked jurisdiction because a special judicial committee established by the UAE Federal Judiciary in Sharjah was already supervising disputes relating to the deceased’s estate.

The Court of Cassation rejected this argument.

The Court emphasized that:

Each Emirate maintains an independent judicial authority pursuant to Article 104 of the UAE Constitution;
Abu Dhabi courts possess territorial jurisdiction over disputes relating to real property located within Abu Dhabi;
The Sharjah judicial committee’s jurisdiction was limited to disputes pending before specifically identified federal courts and did not extend to Abu Dhabi local courts.

The Court further referred to Article 34 of the UAE Civil Procedure Law, which provides that jurisdiction in real property disputes belongs to the court within whose territorial jurisdiction the property is situated.

Because the property was located in Abu Dhabi, the Abu Dhabi courts retained proper jurisdiction over the dispute.

Arguments Concerning Simulated Contracts and Powers of Attorney

The heirs additionally argued that:

The sale agreement was simulated or fabricated;
The purchaser failed to prove payment of the purchase price;
The power of attorney relied upon did not authorize execution of the sale;
The transaction contradicted directives issued by the Ruler of Abu Dhabi concerning property transfers.

The Court reaffirmed established UAE legal principles concerning simulated contracts, explaining that where parties seek to challenge the apparent terms of a written contract, such allegations generally require written evidence unless fraud or illegality affecting public policy is established.

Nevertheless, the Court concluded that discussion regarding the scope of the power of attorney became legally irrelevant after determining that the transaction itself was invalid for failure to comply with mandatory registration procedures.

Final Judgment

The Abu Dhabi Court of Cassation ultimately ruled:

To reject both cassation appeals;
To uphold the Court of Appeal judgment;
To maintain refusal of the claim seeking validation and enforcement of the unregistered sale agreement;
To permit continuation of proceedings concerning restitution, reimbursement, and compensation claims before the lower court.

Legal Significance of the Judgment

This judgment carries substantial importance for real estate investors, developers, purchasers, heirs, and legal practitioners operating within Abu Dhabi.

1. Mandatory Registration Requirements

The judgment strongly confirms that real estate transactions in Abu Dhabi must comply strictly with mandatory registration procedures before the competent municipal authority.

Private agreements executed outside the official registration framework cannot be judicially enforced.

2. Limited Scope of “Validation and Enforcement” Claims

The decision clarifies that traditional civil claims seeking “validation and enforcement” of contracts cannot override mandatory real estate registration rules imposed by local legislation and executive directives.

3. Protection Through Restitutionary Claims

Importantly, the Court protected the purchaser’s ability to seek reimbursement and compensation based on unjust enrichment principles despite invalidity of the underlying transaction.

This creates an important safeguard for parties who entered into defective property transactions in good faith.

4. Jurisdictional Clarification

The judgment also provides valuable clarification concerning territorial jurisdiction between local Emirate courts and specialized federal judicial committees handling estate disputes.

Conclusion

The Abu Dhabi Court of Cassation judgment dated 6 May 2026 in Civil Cassation Cases Nos. 72 and 74 of 2026 constitutes an important authority concerning real estate transactions in Abu Dhabi.

The decision reinforces the mandatory nature of real estate registration requirements and confirms that unregistered property sale agreements cannot be judicially validated or enforced. At the same time, the Court recognized that parties may still pursue restitutionary remedies arising from payments, expenditures, and enrichment resulting from invalid transactions.

The judgment therefore serves as a critical reminder that parties engaging in real estate transactions within Abu Dhabi must ensure strict compliance with municipal registration procedures and should avoid reliance upon informal or privately executed transfer arrangements before initiating recognition or execution proceedings.

If you require further clarification or legal assistance concerning the matters discussed in this article, please do not hesitate to contact Kh legal Advocates & Legal Consultants LLC. Our lawyers would be happy to assist you.

Authors:

Abu Dhabi Court of Cassation Judgment on Unregistered Real Estate Sales, Validity of Property Transactions, and Jurisdictional Challenges